Integrated Care at Heart of Health Reform?

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As pressure ramps up to reduce health care costs and increase quality, there is a more pressing need for physicians and hospitals to work collaboratively. That was the word from Laura Jacobs of the Camden Group, who presented the core ideas at a recent briefing sponsored by the California HealthCare Foundation, which publishes California Healthline.

“The Affordable Care Act has certainly been an accelerator for the trend we’ve seen in physician-hospital integration,” Jacobs said. “Payment reform, which is an inherent part of the ACA, is one of the things that’s driving this acceleration, and in some ways modification, of the ways physicians and hospitals are integrated.”

In the recent past, she said, physicians had independent practices, and hospitals were concerned with operating their facilities. But with the introduction of managed care, physicians banded into group practices as a way to share risk, she said. Those practices, and the HMOs they dealt with, created a different relationship with hospitals.

Now that relationship is changing again out of necessity, Jacobs said.

“We need to solidify the relationship between physicians and hospitals,” she said. “One of the core objectives of the ACA is to monitor quality and control cost. And to do that, we need the infrastructure to do that.”

Close collaboration is needed between physicians, medical groups and hospitals to put new management and clinical systems in place, Jacobs said. And those infrastructure and systems improvements are not cheap, she added. The cost of these changes and the need for better collaboration has led to adoption of several new management models:

“One is co-management,” Jacobs said, “to help manage a service line. To be more efficient, demonstrate quality and bring down costs, physicians and hospitals need to work together to bring down those costs.” This model is used for orthopedics, for example, she said.

Demonstration projects in California testing the idea of bundled payments may get a boost from health care reform, Jacobs said. “The ACA is looking to expand these demonstration projects,” she said. “The idea is bundling the physician and hospital payment together, to force collaboration and share financial risk.” Bundling payments is usually done with procedures such as hip and knee replacements.

“The patient-centered medical home is a model promulgated to enhance primary care,” Jacobs said. “It’s a way to reward coordination of care and manage chronic disease better.”

The last is accountable care organizations, which emphasize continuum of care, along with quality and cost incentive payments. “Part of the battlefield today is not only the structure of the ACO, but also who will lead an ACO in our market,” Jacobs said. “Who’s going to take the lead?”

Part of the challenge with converting to an ACO, and really to all of these management structures, Jacobs said, is that they include infrastructure improvements.

“Not every organization can afford this process of integration,” Jacobs said. “The requirements for being an ACO are considerable, both in terms of capital and information technology.”

The bottom line, she said: “There is a demand for capital to fund these new structures. And that leads to the question, how do we access the capital? How do we share the cost of moving down this path of integration and consolidation?”

The good news for Californians, she said, is that all of these new models of care focus on quality improvements.

“Clearly, through all of this, we have to focus on patients,” Jacobs said. “Most of this has been good for patients. Health care is more affordable, better quality, more coordinated, more accessible — all of those things that are being promoted through health care reform.”

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